MmO2 plans Rugby replay

MOBILE phones giant mmO2 is understood to be close to announcing a new sponsorship deal with the Rugby Football Union following the phenomenal coverage it received when England won the World Cup.

Experts say a new four-year contract could cost anything up to £10m, almost double the previous one. The company first became the exclusive England sponsor in 1995 under its then name of BT Cellnet.

Industry analysts believe that it spent between £4m and £6m to strike its current four-year agreement, which runs until this summer.

Both sides are keen to renew the contract and to be able to announce this well ahead of the summer when, coincidentally, mmO2 chairman David Varney is due to retire.

The company is currently working out exactly how much the World Cup may have been worth to it. In simple terms of buying the equivalent amount of television advertising space, the figure certainly runs into several million pounds.

A spokesman said: 'It's impossible to put an actual value on it but we do know that awareness of O2 as a brand is now the highest it has ever been and is well ahead of where Cellnet ever was.'

Ironically, this brand identity was helped rather than hindered by the fact that Prince Harry wore an old Cellnet logo shirt to the matches in Australia.

Despite efforts by O2 to persuade the Prince to wear a new shirt, he stuck by an old jersey, which was given to him by England's star fly-half Jonny Wilkinson.

The publicity generated by the story helped make up for a decision by the World Cup organisers to ban teams from wearing sponsors' logos on their shirts during games.

There had been speculation that O2 may not want to commit to a more expensive deal, leading to rumours that fierce rival Vodafone may pounce and add the England rugby team to a portfolio that already includes the England cricket team, Manchester United, Ferrari, the Derby and the Australian rugby team.

Neither the RFU nor O2 are likely to make public the scale of a renewed sponsorship deal. But even if it tops £10m, it will remain relatively small when compared with Vodafone's recent new four-year contract to sponsor Manchester United at a cost of £36m.

Sales of England merchandise have jumped significantly since the Rugby World Cup final. The RFU expects a steady 20% increase in revenue, and it it wants to reinvest this in the grass roots of the game.